Essays On Macroeconomic Policy And Growth In India

Shankar Acharya is Member, Board of Governors, and Honorary Professor, Indian Council for Research on International Economic Relations, New Delhi. Rakesh Mohan is Professor in the Practice of International Economics and Finance, School of Management and Senior Fellow, Jackson Institute of Global Affairs, Yale University.

Government Policies and Economic Growth Essay

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As a society, our standard of living depends on our ability to produce goods and services (Mankiw, 2012). The ability to produce these goods and services depends on several factors including physical capital, human capital, natural resources, and technology (Mankiw, 2012). The government plays an important role in an economy’s growth rate. They achieve their influence on the growth rate through their implementation of several government policies. These policies not only influence the economy’s growth rate, but also play a significant role in day-to-day life. Government policies on savings and investments play an important role in influencing both the economic growth rate and day-to-day lives. A country’s saving and investing rates…show more content…

Since I am taxed highly as a single, white, twenty-five year old male, I have less income to invest in savings. My taxes are going to programs that I will potentially not benefit from when I get to retirement age. Taking my income to fund someone else’s social security leaves less extra money for savings. Since savings have such and integral role in economic growth, the government policies made towards savings directly impact economic growth and day-to-day lives of its citizens. Education has also played an important part in influencing a country’s economic growth. A country’s investment in education is equal to their investment in physical capital for their long term economic success (Mankiw, 2012). With a more educated population, a country’s productivity can significantly increase. This increase can be a result of increased technology and more efficient ideas on productivity. The Organization for Economic Co-operation and development (OECD), a Paris based organization, developed the Program for International Student Assessment (PISA) (Education-Portal.com, 2010). This organization tests fifteen year olds on their math and science skills, and links the scores to a country’s increase in Gross Domestic Product (GDP). This group found the average scores to be five hundred (Education-Portal.com, 2010). If the nations tested could increase their scores by twenty-five points over the next twenty years, it would increase the GDP by one hundred and